Senate eliminates insurance tax credit; savings would be used to lower vehicle fees
TALLAHASSEE | Legislation fiercely opposed by Jacksonville-based Florida Blue and other state insurers was unanimously passed Wednesday by the Senate.
The bill (SB 1832) eliminates a 26-year old tax break insurers can take on the payroll of salaried employees. The break has saved the industry $3.3 billion since its inception.
The money would be used to decrease the cost of fees for things like vehicle registration. Under the bill, which passed on a 39-0 vote, residents would see a roughly $12 savings on an annual car registration.
The Senate easily swatted an amendment by Jacksonville Democrat Audrey Gibson that would have authorized a study of the issue rather than the removal of the tax break.
"This amendment simply says before we endanger job creation by the industry that we study the issue," said Gibson.
Gibson voted for the bill, but made the late attempt to keep the tax credit because the insurance industry has a large footprint in Jacksonville.
Bill sponsor, Sen. Joe Negron, R-Stuart, said it was important to roll back the vehicle fees, which were hiked in 2009 when lawmakers faced plummeting state revenues.
"I personally believe with everything going on in session, let's try to do something for the men, women and the families we represent," he said.
During the bill's committee stops, insurance lobbyists lined up and said removal of the tax cut would hurt the industry's ability to create jobs.
"This would cost Florida Blue $32.5 million," Mike Hightower, a company lobbyist, said during an April 18 committee hearing.
He told lawmakers that would be on top of the $110 million hit Florida Blue will take under the Affordable Care Act, or Obamacare.
Negron said he thinks the insurance industry can thrive without the tax cut and understood Gibson's regional concern.
"If I were from Jacksonville I would be extremely proud of the insurance industry," he said. "I certainly want our insurance industry to thrive."
The push has faced outside opposition, with business lobby Associated Industries Florida funding television ads defending what they call the "working tax cut." The ad does not mention what the tax is for, or that it applies to the insurance industry.
It says the tax credit has helped create 40,000 jobs, a number PolitiFact Florida, nonpartisan fact checking site, gave a "pants on fire" rating because AIF "cherry picked" numbers.
The legislation is the beginning of a larger examination of tax credits offered to a host of Florida industries. Senate President Don Gaetz, R-Niceville, has said one of his priorities is to ensure the credits are still beneficial to state taxpayers.
Negron's bill does not have a House companion, but that chamber can take up the Senate's version.
Matt Dixon: (352) 233-0777